Maersk Will Cut Up to 12% of Oil Jobs After Prices Slump

  • Cuts are part of plan to reduce costs by 20% by end of 2016
  • Shares erase some of Friday's loss after group profit warning

A.P. Moeller-Maersk plans to cut as much as 12 percent of its global oil unit workforce amid lower crude prices.

The move will help Maersk Oil reach its goal of cutting expenses by 20 percent by the end of 2016 and brings the total number of job cuts this year to about 1,250, the company said in an e-mailed statement on Monday.

“We expect the pressure to continue into 2016 and we must remain cost-focused to grow in this market,” Maersk Oil Chief Executive Officer Jakob Thomasen said in the statement.

The decision follows a move by Maersk last week to cut its outlook for profit as the conglomerate also faces headwinds in the container shipping market. The group sees underlying profit for the year at $3.4 billion, versus its earlier forecast of $4 billion, it said on Friday.

Maersk shares added to gains after the announcement and rose as much as 2.9 percent. The stock traded 2.7 percent higher at 10,200 kroner as of 10:56 a.m. in Copenhagen. The shares lost 5.2 percent on Friday after the group’s profit warning.

Maersk Oil on Sept. 9 cut $1 billion from its annual budget for capital expenditure. The unit is still seeking acquisitions to expand its dwindling output, group CEO Nils Smedegaard Andersen said last week.

The unit had previously this year announced 220 job cuts in the U.K. related to the retirement of its Janice field, as well as 60 job reductions in Angola and the U.S. relating to its Chissonga project. Both those rounds of cuts are included in Monday’s announcement, Maersk said.

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